138.74 outof140 points (99.10%) - MGMT-026 · PDF file• 138.74 outof140 points (99.10%) 1 award: 10 out of ... Card. Transferred $9,100 of credit card receipts to Continental, requesting

• 138.74 outof140 points (99.10%)

award:

1 10 out of • 10.00

.... · · · · ···points" Levine Company uses the perpetual inventory system and allows customers to use two credit cards in charging purchases. With the Suntrust Bank Card, Levine receives an immediate credit to its account when it deposits sales receipts. Suntrust assesses a 4% service charge for credit card sales. The second credit card that Levine accepts is the Continental Card. Levine sends its accumulated receipts to Continental on a weekly basis and is paid by Continental about a week later. Continental assesses a 2.5% charge on sales for using its card.

Apr. 8 Sold merchandise for $7,800 (that had cost $5,764) and accepted the customer's Suntrust Bank Card. The Suntrust receipts are immediately deposited in Levine's bank account.

12 Sold merchandise for $9,100 (that had cost $5,897) and accepted the customer's Continental Card. Transferred $9,100 of credit card receipts to Continental, requesting payment.

20 Received Continental's check for the April 12 billing, less the service charge.

Prepare journal entries to record the above selected credit card transactions of Levine Company.

Date

Apr. 8

Apr. 8

Apr. 12

Apr. 20 I-

General Journal Cash

Credit card expense

Sales

Cost of goods sold

Merchandise inventor/

Accounts receivable- Continental

Credit card expense

Sales

Cost of goods sold

Merchandise inventory

Cash

Accounts receivable- Continental

Debit Credit

./ 7,488<i

./ 312<i

./ 7.800./

./ 5,764./

./ 5,764<i

./ 8,872.i'

./ 228./

./ 9, 100./

./ 5,897./

./ 5,897./

./ 8,872./

./ 8.872<i

swsrd:

2 8.74 out of • 10.00

.......................... points" The following selected transactions are from Ohlmeyer Company.

2012 Dec. 16 Accepted a $10,800, 60-day, 8% note dated this day in granting Danny Todd a time extension

on his past-due account receivable. 31 Made an adjusting entry to record the accrued interest on the Todd note.

2013 Feb. 14 Received Todd's payment of principal and interest on the note dated December 16. Mar. 2 Accepted an $6, 100, 8%, 90-day note dated this day in granting a time extension on the past·

due account receivable from Midnight Co. 17 Accepted a $2,400, 30-day, 7% note dated this day in granting Ava Privet a time extension on

her past-due account receivable. Apr. 16 Privet dishonored her note when presented for payment. June 2 Midnight Co. refuses to pay the note that was due to Ohlmeyer Co. on May 31. Prepare the

journal entry to c11arge the dishonored note plus accrued interest to Midnight Co.'s accounts receivable.

July 17 Received payment from Midnight Co. for the maturity value of its dishonored note plus interest for 46 days beyond maturity at 8%.

Aug. 7 Accepted an $7,450, 90-day, 10% note dated this day in granting a time extension on the past-due account receivable of Mulan Co.

Sept. 3 Accepted a $2, 100, 60-day, 10% note dated this day in granting Noah Carson a time extension on his past-due account receivable.

Nov. 2 Received payment of principal plus interest from Carson for the September 3 note. Nov. 5 Received payment of principal plus interest from Mulan for the August 7 note. Dec. 1 Wrote off the Privet account against Allowance for Doubtful Accounts.

(Do not round intermediate calculations . Use 360 days a year.)

Required: First, complete the table below to calculate the interest amount at December 31.

Principal

Rate(%)

Time

Total interest

$

$

Total through maturity

Interest recognized

December31

10.800./ $ 10,800./

8%./

60/360./

144./ $

8%./

15/360./

36./

Use the calculated value to prepare your journal entries for 2012 transactions.

Date

Dec 16

GeneTal Journal

Notes receivable- D. Todd

I ~"'--~ln-te_r_est receivable Interest revenue

First, complete the table below to calculate the interest amounts.

Midniaht Co. Note - Mar<:h 2 2013

Midnight Total through q,mpany Note maturity

I Principal $ 6.100./

Rate(%) 8%./

!Time 90/360./

jTotal interest $ 122./

A. Privet Note - Mar-ch 17 2013

Privet note Total through maturity

I Principal $ 2.400./

Rate(%) 7%./

!Time I-

30/360./


Mulan Note - August 7 2013

Mulan Co. note Total through maturity

I Principal $ 7.450J Rate(%) 10%./

!Time 90/360./


MidniQht Co. Note - June 2. 2013

Midnight Co. Adlflllonal Interest

,Principal $ 6,222./

[Rate(%) 8%./

Time 461360./

Total interest $ 64.I

N. Carson Note - September 3 2013

carson note Total through maturity

Principal $ 2.100./ -Rate(%) , __ 10%./

Time 60/360./

Total interest $ 35./

Debit

.I 10,800./1

x

.I 36./

.I

Use those calculated values to prepare your journal entries for 2013 transactions.

Date General Journal Debit

Feb 14 Gash .I 10,944./

Interest revenue .I Notes receivable- D. Todd ./

x

Mar02 Notes receivable- Midnight Co ./ 6,100./1

x

Mar 17 Notes rece·ivable- A. Privet .I 2,400./

x

Apr 16 Accounts receivable- A. Privet ./ 2,414./

Notes receivable- A. Privet .I Interest revenue ./

Jun 02 Accounts receivable- Midnight Co .I 6,222./

Notes receivable- Midnight Co .I Interest revenue .I

Jul 17 Cash .I 6,286./

Interest revenue .I Accounts receivable- Midnight Co ./

Aug07 Notes receivable- Mulan ./ 7,450./

x

Sep03 Notes receivable- N. Garson ./ 2,100./

x

Nov02 Cas11 ./ 2, 135./

Notes receivable- N. Garson ./ Interest revenue

.,,.,-Nov 05 Gash ./ 7.636./

Notes receivable- Mulan ./ Interest revenue ./

Dec 01 Allowance for doubtful accounts ./ 2,414./1

Accounts receivable- A. Privet ./

credit

x

36./

credit

108./

10,800./

x

x

x

2,400./

14./

6,100./

122./

64./

6,222./

x

x

2.100./

35./

7,450./

186./

2.414.I

3. sward: 10 out of 10.00

............................. points ..

Prepare journal entries for the following credit card sales transactions (the company uses the perpetual inventory system).

1. Sold $20,000 of merchandise, that cost $15,000, on MasterCard credit cards. The net cash receipts from sales are immediately deposited in the seller's bank account. MasterCard charges a 5% fee.

Event General Journal Debit Credit

1 Gash " 19,000./

Credit card expense " 1,000./

Sales " 20,000./

2 I Cost of goods sold " 15,000./

Merchandise inventory " 15.000./

2. Sold $5,000 of merchandise, that cost $3,000, on an assortment of credit cards. Net cash receipts are received 5 days later, and a 4% fee is charged.

Event General Journal Debit Credit

1 Accounts receivable- Credit card cos. " 4,800./ -Credit card expense " 200./ - Sales " 5,000./ ,_

~' -

Cost of goods sold " 3,000./

Merchandise inventory " 3,000./

3 Cash " 4,800./

Accounts receivable- Credit card cos. " 4,800./

4. award: 10 out of 10.00

Gomez Corp. uses the allowance method to account for uncollectibles. On January 31, it wrote off a $800 account of a customer, C. Green. On March 9, it receives a $300 payment from Green.

1. Prepare the journal entry for January 31.

Dllte

Jan 31

General Journal Allowance for doubtful acoeounts

Accounts receivable- C. Green

Debit Credit

./ 800./

./ 800./ --~-

2. Prepare the entries for Marcl1 9; assume no additional money is expected from Green.

Date General Journal Debit Credit

Mar09 Accounts receivable- C. Green ./ 300./

Allowance for doubtful accounts ./ 300./

Mar09 Cash ./ 300./

Accounts receivable- C. Green ./

5. g.vard: 10 out of 10.00

·····························points · Warner Company's year-end unadjusted trial balance shows accounts receivable of $99,000, allowance for doubtful accounts of $600 (creodit), and sales of $280,000. Uncollectibles are estimated to be 0.5% of sales.

Prepare tl1e December 31 year-end adjusting entry for uncollectibles.

Date

Dec. 31

General Journal Bad debts expense

Allowance for doubtful ac~ounts

Debit Credit

./ 1,400./

./ 1,400./

6. award: 10 out of 10.00

Liang Company began operations on January 1, 2012. During its first two years, the company completed a number of transactions involving sales on credit, accounts receivable collections, and bad debts. These transactions are summarized as follows:

2012 a. Sold $1,345,434 of merchandise (that had cost $975,000) on credit, terms n/30. b. Wrote off$18,300 ofuncollectible accounts receivable. c. Received $669,200 cash in payment of accounts receivable. d. In adjusting the accounts on December 31, the company estimated that 1.5% of accounts receivable

will be uncollectible.

2013 e. Sold $1,525,634 of merchandise (that had cost $1,250,000) on credit, terms n/30. t. Wrote off $27,800 of uncollectible accounts receivable. g. Received $1,204,600 cash in payment of accounts receivable. h. In adjusting the accounts on December 31, the company estimated that 1.5% of accounts receivable

will be uncollectible.

Required: Prepare journal entries to record Liang's 20 12 summarized transactions and its year-end adjustments to record bad debts expense. (The company uses the perpetual inventor/ system and it applies the allowance method for its accounts receivable.) (Round your intermediate calculations to the nearest dollar amount.)

Transaction General Journal Debit Credit

a(1) Accounts receivable ./ 1,345,434./ ~-1---

./ 1,345,434./ t= Sales

a(2) Cost of good sold ./ 975, 000./

Merchandise inventory ./ 975,000./

c b. Allowance for doubtful accounts ./ 18, 300./ -

Accounts receivable

t= ./ 18,300./

c. Cash ./ 669, 200./

Accounts receivable ./ 669,200./ - -

t=d. Bad debts expense ./ 28, - -

169./,

Allowance for doubtful accounts ./ 28,169./

Prepare journal entries to record Liang's 20 13 summarized transactions and its year-end adjustments to record bad debts expense. (The company uses the perpetual inventory system and it applies the allowance method for its accounts receivable.) (Round your intermediate calculations to the nearest dollar amount.)

Transaction General Journal Debit Credit

e(1) Accounts receivable ./ 1,525,634./

Sales ./ 1,525,634./

G c2> Cost of good sold ./ 1,250,000./

Merchandise inventory ./ 1,250,000./

f. Allowance for doubtful accounts 27,800./

t= Accounts receivable 27,800./

g. Cash ./ 1,204,600./

Accounts receivable

t= ./ 1,204,600./

h. Bad debts expense ./ 32, 199./


sward:

7 10 out of • 10.00 ..................... points ....................................................................................................................................................................................................... ..

At year-end (December 31), Chan Company estimates its bad debts as 0.50% of its annual credit sales of $604,000. Chan records its Bad Debts Expense for that estimate. On the following February 1, Chan decides that the $302 account of P. Park is u ncollectible and writes it off as a bad debt. On June 5, Park unexpectedly pays the amount previously written off.

Prepare the journal entries of Chan to record these transactions and events of December 31, February 1, and June 5.

Date General Journal Debit Credit • Dec. 31 Bad debts expense ./ 3,020./


Feb. 1 Allowance for doubtful accounts ./ 302./

Accounts receivable- P. Park ./ 302./

Jun 05 Accounts receivable- P. ParK ./ 302./

Allowance for doubtful accounts ./ 302./

Jun 05 Cash ./ 302./

Accounts receivable- P. Park ./ 302./ •

• •

sward:

8 10outof . 10.00

........................... points···· Following are selected transactions for Ridge Company.

Mar. 21 Accepted a $3,400, 180-0ay, 8% note dated March 21 from Tamara Jackson in granting a time extension on her past-due account receivable.

Sept 17 Jackson dishonors her note when it is presented for payment Dec. 31 After exhausting all legal means of collection, Ridge Company writes off Jackson's account

against the Allowance for Doubtful Accounts.

First, complete the table below to calculate the interest amounts at September 17. (Use 360 days a year.)

Total through

maturity

Principal $ 3,400.,il

Rate(%) 8%.,il . Time 180/360.,il

Total interest $ 136.I

Use the calculated value to prepare your journal entries.


Mar. 21 Notes receivable- T Jackson 3,400.,il

Accounts receivable- T. Jackson 3,400.,il

Sept 17 Accounts receivable- T. Jacl<son .I 3,536.,il

Interest revenue .I 136.,il

Notes receivable- T Jackson .I 3,400.,il

~31 Allowance for doubtful accounts .I 3,536.,il

Accounts receivable- T Jackson .I 3,536.,il

9. sward: 10 out of 10.00 ............. points ...................................................... ..

On August 2, 2013, Jun Co. receives a $6,000, 90-0ay, 12% note from customer Ryan Albany as payment on his $6,000 account.

Prepare the journal entry assuming the note is honored by the customer on October 31, 2013. (Use 360 days a year.)


Oct. 31 ' cash ./ 6,180./l - Notes receivable- R. Albany ./ 6,000./

Interest revenue ./ 180./ ~

Morales Company recorded the following selected transactions during November 2013.

Date General Journal Debit Credit Nov. 5 Accounts Receivable- Ski Shop 4,670

Sales 4,670

10 Accounts Receivable- Welcome Enterprises 2,435 Sales 2,435

13 Accounts Receivable- Zia Natara 1,428 Sales 1,428

21 Sales Returns and Allowances 368 Accounts Receivable- Zia Natara 368

30 Accounts Receivable- Ski Shop 5,076 Sales 5,076

10. award: 10 out of 10.00

·················· · ·pomrs ······················································································································································· ······························································································································································································································································· 1. Prepare a general ledger having T-accounts for Accounts Receivable, Sales, and Sales Returns

and Allowances. Also open an accounts receivable subsidiary ledger having a T-account for each customer. Post these entries to both the general ledger and the accounts receivable ledger.

Nov. 5

Nov. 10

Nov. 13

Nov. 30

jEnd.Bal

General Ledger

Accounts Receivable

4,670.,llNov. 21

2,435.,11

1,428.tl

5076J I

1 3,24~ i--

368..,i

0

0

0

0

• SeJ t\tJ(t .~ ..... t<l:. i·o n:~l-"'-'Jr:.:t: W<1.:. cJ(;;ic:de?d •• .:1 u:l oc .. 'a m 11, #·L<1 <:.ed u..__,..:x,i tl 6 • Wired; (! ~vC'l tJi

Jf.di.d!Jd.

Sales Returns and Allowances

~Nov. 21 36~.,ll= + 36~ I I End.Bal

0

0

0

' =\eel text ·<1...at~l> n;;; ~:.;>.i · ~ ,,.,,., c1q;o: .. t-::d ..s tz l uc <1 fuum • .ll · t.,,.,.wd t;oi;.._ ilt~ c. •U:::'r-cot.t; M f <I .t 11 d-::di..<..t<id.

Welcome Enterprises

Nov. 10 .I 2,435J I + 0

r + _ o l_ 0

2,43~ I 0

:EndBal I •;(crJ tl!xt ·~ti:!!> r ..1 ~-::~c~ w.i.:. -:Xf.!.;.kd ii• .. ·-.:1 ..1 • .. f..1m 11..\a· W..C:l <..:1 . ... ..., : •• w ..., . ;.r.:rn:d; f' ;.1 t:<.1c '1..:. de,h.(.~ed .

Sales

o INov 5 .I 4,670.,I -- o- INov 10 .I 2,435.,I

o- INov 13 .I 1,428.,I

_ o_ l_Nov 30 .I 5,076.,I --I 0 0

End.Bal 13,609 I

":ted ~xt ·:JMt-:::. t·o ~,,.-:;<i~!oe .,., .,_,. e.l(~C-::'1 • <i eel c1 <1 f<.11·11U:e · !.:-:1 ..e:(! G.1"\.'u'-'t-.: .~ •wrn:<.t; ra ;.'<.:! b d-e-;L<.t=d.

~Nov. 5

Nov. 30

End.Bal

Ski Shop

4670.tl_

5,076.,11

0 r 9,746

--

0

0 -0

·~::J tCJ(t "'J<.<it.:1> ru n::.;.w...e 11<111 ~ c:Kp;:t.!<:d ii(;.::. ur ~ 'C''ll-Li·:..:t :o<::J wtci. <1~1• ~ •·oc•~c:t.t, rv pc ~ d..:d:i·-~t:d.

Zia Natara

Nov. 13 .I 1,428.,llNov 21 .I 368.,I

+ 1.06~ I + 0

0

I I End.Bal

• ~c:d h:xt .J"~.:.'l!, 'IJ tl::;.p;:1·..:..: w.e::. e.l(~t.:J .. .. .:.I ':.tf <1 '.: ·~•-.><1 ·toc:.e:J <.d - t.><iW .., r CC.1ttr.t; Ill.: p;.J<1rh d::d,.i.<'.t:!d.

11. eward: 10 out of 10.00 ............. ·points ................................................................ ..

2. Prepare a schedule of accounts receivable.

Morales Company ==

Schedule of Accounts Receivable

November 30, 2013

Ski Shop ./ $ 9,746./

Welcome Enterprises ./ 2,435./

Zia Natara ./ 1,060./

Total $ 13,241

award:

12 10 out of . 10.00

·· .......................... points .. Warner Company's year-end unadjusted trial balance shows accounts receivable of $99,000, allowance for doubtful accounts of $600 (credit), and sales of $280,000. Unc-0llectibles are estimated to be 1.5% of accounts receivable.

1. Prepare the December 31 year-end adjusting entr1 for unc-0llectibles.

Date

Dec. 31

General Journal Bad debts expense

Allowance for doubtful accounts

Debit Credit

./ 885./

./ 885./

2. What amount would have been used in the· year-end adjusting entry if the allowance account had a year-end unadjusted debit balance of $300?

unt used in the year-i!nd adiustin entry $ 1,785./

oward:

13 10outof • 10.00 ................... . i>oiiits ..................................................................................................... ..

The following data are taken from the comparative balance sheets of Ruggers Company.

2013 Accounts receivable, net $153,400 Net sales 861,105

2012 $138,500

910,600

Complete the below table to calculate the accounts receivable turnover for the year 2013.

Choose Numerator:

Net sales

$

./ I

861,105./ I

Accounts receivable turnover

Choose Denominator:

Average accounts receivable, net ./ = $ 145,950./ =



5.9 j times -~~-

14. 8\'Vard: 10 out of 10.00

Mayfair Co. allows select customers to make purchases on credit. Its other customers can use either of two credit cards: Zisa or Access. Zisa deducts a 3% service charge for sales on its credit card and credits the bank account of Mayfair immediately when credit card receipts are deposited. Mayfair deposits the Zisa credit card receipts each business day. When customers use Access credit cards, Mayfair accumulates the receipts for several days before submitting them to Access for payment. Access deducts a 2% service charge and usually pays within one week of being billed. Mayfair completes the following transactions in June. (The terms of all credit sales are 2/1 5, n/30, and all sales are recorded at the gross price.)

June 4 Sold $650 of merchandise (that had cost $400) on credit to Natara Morris. 5 Sold $6,900 of merchandise (that had cost $4,200) to customers who used their Zisa cards. 6 Sold $5,850 of mercl1andise (that had cost $3,800) to customers who used their Access cards. 8 Sold $4.350 of merchandise (that had cost $2,900) to customers who used their Access cards.

10 Submitted Access card receipts accumulated since June 6 to the credit card company for payment.

13 Wrote off the account of Abigail McKee against the Allowance for Doubtful Accounts. The $429 balance in McKee's account stemmed from a credit sale in October of last year.

17 Received the amount due from Access. 18 Received Morris's check in full payment for the purchase of June 4.

Required: Prepare journal entries to record the preceding transactions and events. (The company uses the perpetual inventory system.) (If no entry is required for a particular transaction, select "No journal entry required" in the first account field.)

Date

June 04

June 04

June 05

June 05

June 06

June 06

June 08

June 08

June 10

June 13

June 17

June 18

l

General Journal Accounts receivable- N. Morris

Sales

Cost of goods sold


Cash

Credit card expense

Sales

Cost of goods sold


Accounts receivable- Access

Credit card expense

Sales

Cost of goods sold



Credit card expense

Sales

Cost of goods sold


No journal entr; required

Allowance for doubtful accounts

Accounts receivable- A. McKee

Cash


Cash

Sales discounts

Accounts receivable- N. Morris

Debit Credit

./ 650./

./ 650./

./ 400./

./ 400./

./ 6,693./

./ 207./

./ 6,900./

./ 4,200./

./ 4,200./

./ 5,733./

./ 117./

./ 5,850./

./ 3,800./

./ 3,800./

./ 4,263./

./ 87./

./ 4,350./

./ 2,900./

./ 2,900./

./

./ 429./

./ ·1------1

429./

./ 9,996./

./ 9,996./

./

./

./ 650yl

138.74 outof140 points (99.10%) - MGMT-026 · PDF file• 138.74 outof140 points (99.10%) 1 award: 10 out of ... Card. Transferred $9,100 of credit card receipts to Continental, requesting

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